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Discussion:LLC - one member to two members
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Discussion Forum Index --> Tax Questions --> LLC - one member to two members
| 24 November 2006 | |
| Client started his biz as a single member LLC in 2005 and he filed Sch. C with the LLC EIN. In 2005, he was joined by another member, so for 2006, he needs to file 1065. The question is if he can continue using the original LLC EIN. Client called the IRS help line and was told yes, he has to apply for a new EIN. Please advice and thank you. | |
| 25 November 2006 | |
| The original EIN is associated with a Sch C business. What IRS is saying is that they can't internally change that filing requirement to 1065. What's the harm is obtaining a new EIN? | |
| 25 November 2006 | |
| The only harm in obtaining a new EIN is that you still have an "active" ein which needs to be either closed out by filing a final return (on Schedule C that you disposed of business) or you need to continue to report activity with this EIN number until you notify them that you ceased doing business.... | |
| 26 November 2006 | |
| I believe you just write a letter to the IRS closing out the old LLC. Did the business have employees?
Much easier if it did not. | |
| 26 November 2006 | |
| Jason, please advice how it is different with employees vs no employees. Thanks. | |
| 26 November 2006 | |
| Technically you should not have to do any more at the federal (IRS) level. But, I have had many cases when an employer no longer uses an EIN & the correspondence from the IRS doesn't stop. I know in several instances, I have had to write or call 3-4 times per employer. Also in most states you would also have to cancel the ID numbers for state witholding and/or unemployment. | |
| 17 January 2007 | |
| Check the instructions for SS-4 "Do I Need an EIN?".
The answer is YES a change in the type of organization requires a new EIN, even if no employees are involved. The 1065/1120/1120-S of the 2 mbr LLC cannot use the EIN of the Sch C LLC. | |
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